Whirlpool Corporation is the world's leading global manufacturer and marketer of major home appliances, with annual revenues of approximately $19 billion in 2013, 69,000 employees, and 59 manufacturing and technology research centers around the world. The company markets Whirlpool, Maytag, KitchenAid, Jenn-Air, Amana, Brastemp, Consul, Bauknecht and other major brand names to consumers in nearly every country around the world.

Whirlpool of India's ability to leverage on its parent's product and marketing expertise to launch new products / undertake innovations on existing products in the Indian market puts it in an advantageous position.

June 2014 quarter results

For the quarter ended June 2014, it registered a good 19% rise in sales to Rs 1052.24 crore. OPM improved 290 basis points to 12.4% which saw OP rising 56% to Rs 130.01 crore.

Other income jumped 49% to Rs 8.35 crore and interest cost fell 19% to Rs 25 lakh. Depreciation fell 12% to Rs 14.52 crore.

PBT soared 71% to Rs 123.59 crore.

Tax grew 80% to Rs 40.59 crore after which PAT jumped 67% to Rs 83.00 crore.

Pursuant to the requirements of Schedule II to the Companies Act 2013, with effect from April 1, 2014 management has reassessed the useful life of all fixed assets based on detailed technical evaluation. Depreciation for the current quarter has been provided based on life as prescribed under Schedule II to the Companies Act 2013 except where the useful life estimated by management is lesser than the prescribed life. Consequently, depreciation charge to the statement of profit and loss for the current quarter ended June 30, 2014, is lower by Rs 1.54 crore.

Further, based on transitional provisions provided in Note 7(b) of Schedule II of the Companies Act 2013 the carrying value of fixed assets, where the remaining useful life was nil as at April 1, 2014, amounting to Rs. 3,478.49 lacs (net of deferred tax of Rs. 1,791.15 lacs) has been adjusted with retained earnings.

In FY 2014 sales had grown 2% and PAT had fallen 4%

Focus on cost effectiveness is paying off

The company has, since the past two years, focused on cost control and as a result it enjoys the highest margins in the industry and also within Whirlpool operations globally, despite high inflation and intense competition.

Whirlpool is also focused on improvement in margin by improving product-mix and maximizing fixed cost absorption and productivity gains through economies of scale.

Valuation

The share price trades at Rs 413.